Mattel Shares Drop On Q4 Earnings Miss

Mattel Inc MAT reported a fourth-quarter FY22 sales decline of 22% year-on-year to $1.40 billion, missing the consensus of $1.68 billion.
North America segment sales declined 26% Y/Y, and International sales fell 18%.
Worldwide Gross Billings for Dolls fell 27% as reported, primarily due to declines in Barbie and American Girl.
Worldwide Gross Billings for Infant, Toddler, and Preschool fell 33%, Vehicles grew 6%, and Action Figures, Building Sets, Games, and Others dropped 26%, as reported.
Gross profit declined 32% Y/Y to $602.7 million, and the gross margin contracted 630 basis points Y/Y to 43%.
Operating margin contracted 870 basis points to 5.6%, and operating income for the quarter plunged 69% to $79 million.
Adjusted EBITDA decreased 51% to $157.8 million.
Adjusted EPS of $0.18 missed the analyst consensus of $0.29.
Mattel held $761.2 million in cash and equivalents as of Dec. 31, 2022.
Inventories at the end of the quarter amounted to $894.1 million versus $777.2 million last year.
"Our fourth quarter results were below our expectations, as the macro-economic environment was more challenging than anticipated," said Chairman and CEO Ynon Kreiz.
Outlook: Mattel sees FY23 adjusted EPS of $1.10 - $1.20 (prior year $1.25) versus the consensus of $1.66.
It expects FY23 adjusted EBITDA of $900 million - $950 million (prior year $968 million).
In its Q3 earnings report, the company said it is re-evaluating its 2023 expectations and expected to achieve top and bottom-line growth in 2023.
Price Action: MAT shares are trading lower by 9.37% at $18.58 in premarket on the last check Thursday.

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